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Go into rented before BR

Hi all
i have read so many threads but need specific advice on this . I have been on a dmp with ccs for just over a year and still owe 26k and currently paying £150 a month due to get a wage increase so could end up increasing to 260 a month (into iva territory) i am due for a review this month but was thinking of iva route but only problem is we are stuck on a interest only mortgage on a standard variable rate and now dont earn enough to change mortage company even if we got approved

the mortgage is 162k and our house is worth probably this max so i am contemplating BR as a option as i cant face 5 years of struggle on a iva as there are to many variables (interest rates increasing , wage drop or job loss , increased living costs ect)only to be left with a negative equity mortgage on interest only with no way to pay the capital no savings ect ect

Now i get to my question in order to save for the fees for BR as i am married and the debts are joint and will be joint / linked br we will have to stop paying our mortgage infact all bills except gas ect and water food , council tax i calculated in 3 months we would have enough for the fees and enough for the deposit on a house to rent

so do you stop paying everything while you save for all the fees and house deposits ect then move into rented and file for BR as if i move into rented before going br i wouldnt be able to save for the fees as will be paying rent . I have set up a cashminder account at yorkshire bank so have that ticked off

just need a bit of help of what to do before the big day

sorry if post is all over but it is taking over my life and making me bad tempered and have a 6 year old and a 1 year old and want my life back on track soon as poss so it minimises the impact on their lives

assets none , car value £1200 needed as i cant use public transport as i am driving the bus ! so need to be there before buses run

please help
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Comments

  • markt89
    markt89 Posts: 14 Forumite
    First Post
    Anyone out there to reply ???
  • If you dont mind losing the house and other assets its a good idea. Im not an expert on this subject but went bankrupt recently. Its an amazing release from a losing battle and the fastest way to get your life your life BACK on track.

    You should speak to the citizens advice and know exactly what your getting yourself into before doing anything.
  • How much is your monthly mortgage payment?
    How much would the monthly rent be?

    edit to add: If it was an option would you like to keep the house?
  • If you dont mind losing the house and other assets its a good idea. Im not an expert on this subject but went bankrupt recently. Its an amazing release from a losing battle and the fastest way to get your life your life BACK on track.

    You should speak to the citizens advice and know exactly what your getting yourself into before doing anything.

    thanks for the reply appreciate it , i am now thinking of doing a iva and seeing how the future pans out ie getting a better job , maybe some inheritance and re asses in 6 years if we can sell the house after the iva for maybe 20k more than what i owe we have a nice nest egg for going into rented or a start for a more modest house on a mortgage . i just want to keep my kids life as normal as possible , feel conned after paying £150 on a dmp that could have been a year off a iva instead i have wasted just over £1500 as will be written off regardless on iva

    cheers for the reply
  • Mouse1812 wrote: »
    How much is your monthly mortgage payment?
    How much would the monthly rent be?

    current mortgage 670 a month for 4 bed town house , rented for ex council / old 3 bed semi £600 so i am thinking in essence i am renting my own house lol
  • markt89 wrote: »
    current mortgage 670 a month for 4 bed town house , rented for ex council / old 3 bed semi £600 so i am thinking in essence i am renting my own house lol

    That's the way to think about it. If you have no equity you will not loose it by going bankrupt. The OR will have three years to deal with the house and will only do so if the value goes up. Still got mine.
  • i dont know the answer as im a relative newbie but im in the same position. in a dmp, considering br and have negative equity and paying interest only and thinking of moving into rented but dont know WHEN to do it? if start paying rent now its money that cant be saved, but if looked for rented accommodation after BR im not sure if landlords/agencies would view you very favourable as an undischarged br wouldnt exactly pass credit checks!!!!! difficult one innit??
  • i dont know the answer as im a relative newbie but im in the same position. in a dmp, considering br and have negative equity and paying interest only and thinking of moving into rented but dont know WHEN to do it? if start paying rent now its money that cant be saved, but if looked for rented accommodation after BR im not sure if landlords/agencies would view you very favourable as an undischarged br wouldnt exactly pass credit checks!!!!! difficult one innit??

    Do you want to keep the house? Can you afford the mortgage?

    If both are yes stay put and keep paying the mortgage (think of it as rent).

    If either are no, stop paying the mortgage now and save the money for a deposit and rent. It will take mortgage company several months to repossess and by which time you will be settled elsewhere. Any mortgage shortfall will go into bankruptcy.
  • I decided on the BR route and it is the best thing I have ever ever done by far and its made me a better calmer happier parent and impacted so positively on my two children also! I managed to secure a rental property as an undischarged bankrupt person by paying 6 months rent upfront that I had saved after my bankruptcy by not paying the mortgage! :-) You can check with your local letting agents as a lot of people are in this position - my letting agency did need references for me to get this house tho so you can check that out aswell. The only "bad" thing is that by renting you may have to move one day - but I asked for a three year tenancy so that I could feel at home here and so that I knew I would not be asked to move out in 6 months.............so you can just stop paying your mortgage and go BR and start saving your deposit for a rental property - meanwhile repossession will take AGES and you can get a legal aid property/family(?) solicitor to argue that you have young children and so they should not be uprooted from your home - this could buy you several more months time. You will probably be a discharged BR person by the time you have to move out at the rate they are currently doing repossession proceedings! If you or your wife have any illnesses or health conditions, these can also be taken into consideration. I think as a bus driver owing over 29k was it?.........I worked out that it was going to take me 15 years minimum to pay off my debts............and my file is not going to be clear in another 5 years! Which will fly by! - I am 99% happy about the decision I made because now we can enjoy life and I actually have disposable income whereas before it was all going on repayments - I was existing and not living. Bankruptcy is given a stigma and a bad name - but to date I have absolutely no idea why!! Makes me wonder whether it is the big brother state doesnt want word to get around that BR is actually fabulous because if everybody went BR, then what would happen to the country!!! Good luck whatever you decide and get help from a CAB with your BR application. I got a letter from my official received saying I could keep my car for work no problem - it doesnt matter what value it is (according to her on the telephone). xx
  • I am so pleased that it all worked out for you....The value of a car is £1000 but they will take into account selling fees etc so a true figure is £1700 or that was the case with me, They will not usually allow you to keep a car over this amount, not sure how it works if the car is on finance.
    Good luck onwards and upwards!!!
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